The Central Bank of Ireland has indicated that economic instability due to climate change is an immediate concern rather than a future issue, prompting a restructuring of the financial system. A report by the Central Bank and the Climate Change Advisory Committee highlights Ireland’s insufficient adaptation budget to address rising climate risks.
Climate-induced instability includes financial disruptions from severe weather events, like storms and floods, which harm infrastructure and increase public spending. For instance, Storm Éowyn caused over €300 million in insured losses, marking the highest weather-related payouts in Ireland.
Experts estimate that Ireland needs up to €2.2 billion by 2030 for effective climate adaptation, but current funding is inadequate, risking significant economic fallout. Vasilios Maduros, deputy governor of the Central Bank, emphasized the urgency of addressing these climate risks.
The issue is not isolated to Ireland; countries like Canada are also facing similar warnings. Assessments of fiscal risks from climate change can aid policymakers by pinpointing vulnerable infrastructure and identifying cost-effective upgrades, promoting solutions that combine local planning and nature-based initiatives.
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